State of the Job Market
Posted Jan 08, 2024
STATE OF THE JOB MARKET
Don’t Quit Your Job. 2024’s Labor Market Is Going to Look Much Different From Last Year's.
100% chance of a recession? Economic catastrophe that would end America’s strongest labor market in history? Not in 2023. Try 2024? Last year, the US added over 2.7M jobs — leaving the unemployment rate at 3.7% — just slightly above the 3.5% in Dec. 2022. Average hourly earnings rose 4.1% year-over-year (YoY), outpacing the Consumer Price Index’s 3.1% reading in Nov. 2023.
2024 labor forecast: Despite the positive job growth seen in 2023, not all Americans have felt the supposed strength in the economy — and signs indicate that 2024 won’t be a cakewalk either. The latest Job Openings and Labor Turnover Survey (JOLTS) report reveals that the number of job openings reached its lowest point since Mar. 2021, signaling a potential slowdown in hiring by employers.
- Some fields have been impacted more than others: According to Indeed, software development and marketing job postings, for instance, have fallen 20% since Feb. 2020 — while child care, nursing and retail postings have risen over 20%.
- It’s taking more time to find work: According to WSJ, unemployment claims were up 15% YoY in the week of Dec. 9, reflecting a tighter labor market.
The widening gap in employment trends may result in greater flexibility and job security for workers in high-demand fields (i.e., healthcare, construction) — while high-supply “knowledge workers” (i.e., tech, professional services) might struggle.
Knowledge workers face the AI-mpact?
The hoard of jobs created during the pandemic has dried up — and companies have been on an automation and layoff rampage as part of cost-saving efforts. Per layoffs.fyi data, over 262K tech jobs were eliminated in 2023 — nearly double the amount from the previous year. While layoffs have slowed in recent months, it doesn’t mean employees are off the hook yet.
- According to a December Motherboard survey of 9,338 engineers, nearly 90% revealed that it was harder to find a job now than before the pandemic.
- This year, Twitch, Unity and BlackRock announced massive layoffs that’ll impact nearly 3K workers.
Just the beginning: The ripple effect of AI has almost exclusively been felt in tech-heavy industries, with Duolingo being the latest to axe 10% of its contractors in favor of AI-generated content. Business leaders are increasingly turning to AI, with 37% having replaced workers with AI in the past year, and 44% anticipating layoffs due to AI in 2024 according to a ResumeBuilder report. Pearson says 30% of white-collar jobs are threatened by AI — contrasting with only 1% of blue-collar jobs. Time for a career change?
Average Joe